Edison research update on Diverse Income Trust
London, UK, 26 May 2015
Edison issues research update on The Diverse Income Trust
The Diverse Income Trust (DIVI) differs from other UK Equity Income Trusts though its policy of investing in a wider universe of UK quoted stocks. Managers Gervais Williams and Martin Turner focus on those companies with the greatest potential dividend growth, since they believe that this will ultimately lead to the best returns. Currently this policy has led to only 35% or so of the portfolio being invested in the conventional large/mid-cap universe. In contrast many smaller stocks are growing their dividends rapidly, and the managers believe markets are now entering another period of smaller company outperformance. The DIVI strategy has delivered strong performance since launch in 2011.
UK equities have performed strongly year to date, with even the long out-of-favour FTSE AIM All-Share index achieving a total return of 7.5% from 1 January to 5 May, and the FTSE 100 reaching new all-time highs. However, with P/E valuations for the FTSE All-Share some way above their 10-year average, and with uncertainty around global economic growth, near-term volatility is likely. DIVI currently holds a put option on the FTSE 100 covering approximately one-third of the portfolio that would increase in value if markets were to suffer a major setback.
For the full report see:
http://www.rns-pdf.londonstockexchange.com/rns/2497O_1-2015-5-26.pdf
All reports published by Edison are available to download free of charge from its website.
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